Gov. Bevin and officials unveil proposed Medicaid waiver program

FRANKFORT — Billed as a transformational approach to Medicaid, Gov. Matt Bevin and members of his cabinet unveiled on Wednesday the state’s application for a section 1115 waiver to the Centers for Medicare and Medicaid Services.

If approved, the waiver would model health coverage for those on Medicaid after the state’s insurance plan for public employees, minus dental and vision coverage, Bevin and others said.

The proposal, called Kentucky Health, would also include pilot projects for addiction services and rewards accounts for recipients to boost their coverage to include dental and vision.

The goals of Kentucky Health, Bevin said, are to improve health outcomes, familiarize recipients with private insurance markets so they can transition out of Medicaid and create a sustainable Medicaid delivery model.

The waiver would enact premiums for all but children, disabled adults and pregnant women receiving Medicaid, ranging from $1 per month for those under 25 percent of the federal poverty level to $15 per month for those between 101 percent and 138 percent of the federal poverty level, according to the proposal.

Those in the 101 percent to 138 percent range will pay higher premiums under the plan the longer they’re on Medicaid, maxing out at $37.50 per month after five years in the program.

Mark Birdwhistell, vice president of health affairs for the University of Kentucky and a former health cabinet secretary, said those who don’t pay their premiums will be able to resume coverage

“We’re giving them a chance, we call those ‘on ramps,’ that they have the ability to come back on if they do a health literacy class and pay all of their premiums that are in arrears,” said Birdwhistell, who helped draft the proposed Medicaid waiver.

The state will initiate a 30-day comment period through August 1, with a September 30 target to submit the 1115 waiver application to CMS.

Public hearings have also been set for June 28 in Bowling Green and July 6 in Frankfort and Hazard.

Bevin and others were particularly pleased with their proposal to use Medicaid dollars for pilot projects in 10 to 20 high-risk counties for drug addiction services, according to the proposal. Bevin said that aspect of the waiver proposal would be the first of its kind in the country if approved.

Part of that pilot will include expanding eligibility for short-term treatment at institutions for mental disease to Medicaid recipients aged 21 through 64.

“If you were going into a drug addiction program, they would not be offered up as an option,” Cabinet for Health and Family Services Secretary Vickie Yates Brown Glisson said, referring to the institutions for mental disease.

“Medicaid did not pay for those institutes. If they had more than 16 beds and if you were between 21 and 64, you would not be able to access those particular facilities. We’re asking to waive that limitation, and so now folks that have been licensed as IMDs, you’ll be able to go into those programs for at least a 30-day residential drug treatment program.”

Bevin estimated that the proposal would save $2.2 billion in state and federal tax dollars.

But he warned that he would repeal expanded Medicaid if CMS denied the state’s Medicaid waiver application, and he said the fate of the expansion is in the federal agency’s hands.

The chairwoman of Kentucky Voices for Health questioned how health outcomes would be improved for those who are locked out for non-payment as well as the administration’s decision to forgo dental and vision coverage.

“What sounds like a little bit of money, I think, really ends up being a lot of money,” she told reporters. “So again, from the mental health, substance use side of it, I’m very excited by what they’re proposing with the project on substance use and keeping the mental health benefits, but there’s a lot here, I think, to be concerned about.”

Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky, said her group will closely review the Bevin administration’s proposal.

“Our initial read of the proposal finds that there are areas to applaud in the proposal, including aligning Managed Care Organization practices for greater efficiency, incentives for evidence-based healthy behaviors such as quitting smoking and obtaining a health risk assessment, expansion of presumptive eligibility sites (including local health departments), and commitment to drug use disorder and mental health services,” Zepeda said in a statement.

“The proposal also raises concerns, including the exclusion of dental and vision benefits in the standard benefits package, anticipated significant drops in Medicaid enrollment, elimination of retroactive eligibility and re-enrollment requirements and penalties for those who fail to pay mandated premiums.”

The group headed by Beshear, Save Kentucky Healthcare, said that Bevin “declared war on Kentucky’s working families” during his news conference in the Capitol Rotunda on Wednesday.

“Gov. Bevin still cannot and will not explain how any of these changes will lead to better health, and he ignores a mountain of third-party evidence demonstrating that the system he inherited is not only effective but also sustainable,” the group said in a statement.

“And contrary to his statement, it is up to Gov. Bevin himself to decide whether to terminate expansion, not the federal government – and the accountability for that decision will lie on his shoulders. Our families deserve better than these petty threats.”

Other health officials praised Bevin’s decision.

“The Kentucky Hospital Association applauds Governor Bevin for his leadership in presenting a comprehensive plan to transform Kentucky’s Medicaid program to achieve better health outcomes for Kentuckians, while also focusing on its financial sustainability,” Michael Rust, president and CEO of the Kentucky Hospital Association, said in a statement. “We look forward to working with the Bevin administration in helping to implement this innovative plan.”

Norton Healthcare President Russell Cox said his group “is encouraged by Governor Bevin’s collaborative approach in seeking an 1115 demonstration waiver from the federal government.”

“Through this process, Medicaid expansion in Kentucky should be preserved and strengthened while improving patient care and being good stewards of the Commonwealth’s resources,” he said in a statement.

Written comments on the proposal can be submitted to Stephen Miller, Department for Medicaid Services, 275 East Main Street, Frankfort, KY 40621, or emailed to kyhealth@ky.gov by 5 p.m. July 22.

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.